Westpac's record keeping was 'sloppy': CEO

Westpac chief executive Brian Hartzer says the bank had been sloppy rather than deliberately negligent in its checks on whether potential customers could repay their mortgages.

"We have been a little sloppy on some of the record keeping but I think it is drawing a pretty long bow when you look at the actual performance and of credit quality of the banks over a long period of time to suggest that there is something fundamentally wrong," Mr Hartzer told a business summit in Sydney on Thursday.

"It is not in our interest to give a loan to someone who can't pay it back."

The banking royal commission has heard Westpac and the Commonwealth Bank had flawed processes for making sure home loan applicants were telling the truth about their income, expenses and debts.

Mr Hartzer said banks automatically assessed home loan applications using tech, and warned switching back to manual assessments would not be straightforward.

"It has a consequence for cost and efficiency and availability of credit, and that is likely to hit the people who are at the lower end of the spectrum," he said in his first keynote address since the bank's annual general meeting in December.

He described the evidence coming out of the royal commission as "uncomfortable to hear" and said issues raised had taken "too long to fix".

"I am hopeful that the seriousness of this process can bring closure to the issues raised," said Mr Hartzer.

"It's a tough process for the industry to go through but it's one we must embrace."

He said banks needed to increase transparency and remove conflicts of interest so that customers understand what they are signing up for.

"This is something we need to fix across the industry if we are to show customers that we have their best interests at heart," he said.